• 13 July, 2024
Markets News

Bitcoin Sentiment Hits One-Year Low, Indicating Potential Rebound

Crowd sentiment towards Bitcoin has reached its lowest point in a year, raising the probability of a potential market rebound. The data collected by Santiment from various social media platforms reveals widespread bearish narratives among traders. Historically, such extreme negative sentiment often precedes a market bounce. This trend suggests that the current fear, uncertainty, and doubt (FUD) could lead to a significant price movement in the near future.

Source: Santiment

In the past week, sentiment towards Bitcoin has turned highly negative, with the weighted sentiment metric showing a significant drop to -0.962775. This metric, which measures the collective mood of traders on platforms like X (formerly Twitter), Reddit, Telegram, 4Chan, and BitcoinTalk, indicates the most bearish outlook in a year. The last time sentiment was this low was exactly a year ago, suggesting a potential pattern in market behavior.

Other major cryptocurrencies also exhibit negative sentiment. Ethereum (ETH) shows a notable decline in sentiment, registering -0.299094. Binance Coin (BNB) follows suit with a weighted sentiment of -0.22522. XRP and ADA also display bearish sentiment, with XRP at -0.200075 and ADA slightly positive at 0.085575. This widespread negativity across top cryptocurrencies highlights a unified bearish outlook among traders and investors.

Bitcoin Slips Below $57K: Crypto Market Struggles Amidst Market Sentiment Fears

Despite the current bearish sentiment, historical trends suggest a contrarian perspective might be beneficial. When sentiment reaches such extreme lows, the likelihood of a rebound increases. Traders and investors often position themselves for further declines during these periods. Consequently, any positive news or buying pressure can trigger a short squeeze, leading to a rapid price increase as traders rush to cover their positions.

The latest data shows Bitcoin’s price at $57,616, reflecting significant volatility over the past year. The graph from Santiment illustrates Bitcoin’s price movements, highlighting notable drops and subsequent recoveries. The current negative sentiment may indicate that traders expect further declines. However, this very sentiment could set the stage for a surprising upward movement, as similar events have happened in the past.

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